Audit Division Form Index No. B1 Auditee: Sample County Department Prepared by: KLA Purpose: Bank Reconciliation Analysis Date: Period Audited: Workpaper Prog. Ref. Reference 900.BA031 Bank Reconciliations B2-B13 Findings: Recommendations: B1 KLA Performed By KLA ____________ COUNTY, TEXAS AUDIT FILE INDEX Auditee: Audit Type: Auditor: Audit Date: Audit From: Audit To: USED SECTION DESCRIPTION 100 Audit Report/Management Letter 200 Audit Program / Time Summaries 300 Arrangements/Correspondence 400 Reportable Conditions Point Sheets (Audit Points/Audit to Dos) 500 Overall Findings/Recommendations and Written Response of Official 600 Preliminary Review/Internal Control Environment-Reviewer Comments 700 Follow-up Review/Notes For Subsequent Audit 800 Permanent File (Statutes, Internal Control Questionnaire, etc.) 900 Audit Fieldwork Index ABBREV. FIELDWORK DESCRIPTIONS AP Accounts Payable AR Accounts Receivable BA Bank Activity CC Cash Counts CD Cash Disbursements CF Confirmations CR Cash Receipts FA Fixed Assets FB Fund Balance GL General Ledger IC Internal Control IN Inventories MS Miscellaneous Functions PC Change Funds and Imprest Funds PR Purchasing RP Auditee Reports RV Revenues SL Salaries PROG. REF. SAMPLE AUDIT PROGRAM AREAS: WORK PAPER REF. 900.RP020 Copies Of Reports Prepared By The Auditee 900.RP021 Summary of Collections For The Audit Period 900.RP025 Reports Made By Auditee To Other Agencies 900.BA030 Bank Activity B1 900.BA031 Bank Reconciliations 900.BA032 Proof of Cash (Ownership) 900.BA033 Copies of Bank Statements 900.CC040 Cash Counts 900.CC041 County Change Funds 900.CC042 Sheriff Travel Imprest 900.CC043 Confidential Funds 900.CC044 Surprise Cash Counts 900.CC045 Rapid Deposit Compliance 900.GL050 General Ledger Analysis 900.GL051 Trial Balance 900.GL052 Receivables (including due from State Agencies) 900.GL053 Liabilities (Including due to State Agencies) 900.GL054 Funds Held In Escrow 900.GL055 Fund Balance Reconciliation 900.CR060 Receipt Tests 900.CR061 Checks by mail 900.CR062 Deposit warrants/Receipt issuance 900.CR.063 Misc. Deposits (ACH, WT, Drop Box) 900.CD070 Disbursement Tests 900.CD071 Payroll Sample 900.CD072 Accounts Payable Sample 900.CD073 Direct Payment Sample 900.CD074 Professional Services Sample 900.CF080 Confirmations 900.CF081 Investments 900.CF082 Fines/Fees/Court Cost Paid 900.CF083 Case Dismissals 900.IN090 Inventories 900.IN091 General Office Supplies 900.IN092 Bulk Inventory Items-Stockpiling test 3d652648-6f86-4d1f-9023-4dee935d7dd8.xls 900-Internal Audit File Index 900.FA100 Fixed Asset Analysis 900.SL110 Payroll Process Evaluation 900.SL111 Scheduled Payroll Audit with External Auditors 3d652648-6f86-4d1f-9023-4dee935d7dd8.xls 900-Internal Audit File Index _______________ COUNTY, TEXAS Page 1 of 2 200-AUDIT PROGRAM/INTERNAL AUDIT FILE ORGANIZATION AUDIT WORK ORDER Auditee: Audit Date: / / Audit PeriodFrom: To: Full Scope Full Scope - Surprise Audit Type: Limited Scope Special Conditions Audit Requirements (M=Monthly, Q=Quarterly, A=Annual) Auditor: COMMENTS TOTAL ACTUAL PLANNED DATE HOURS AUDIT STEPS HOURS / / / / / WORKED REVIEW: Permanent File Office Organization Personnel Contract File Statutes DESIGN: Internal Control Questions Audit Program UPDATE: Permanent File AUDIT PROCEDURES: Reportable Cond. Point Sheets Preliminary Report Review Prelim. Report Exit Interview-Official Finalize Report Issue Report Notes for Future Audits Tidy Workfile Total Hours: 3d652648-6f86-4d1f-9023-4dee935d7dd8.xls 200-InternalAuditFileOrg _______________ COUNTY, TEXAS Page 2 of 2 INTERNAL AUDIT FILE ORGANIZATION AUDIT REVIEW AND SIGN OFF Steps Auditor Date Review Date Report - Preliminary draft written and ready for review. Report - Preliminary draft and workpapers reviewed. Exit Interview conducted with official. Report - Final draft prepared. Copies of final report issued to: Department/Official Commissioners Court District Judges Others: 3d652648-6f86-4d1f-9023-4dee935d7dd8.xls 200-InternalAuditFileOrg _______________ COUNTY, TEXAS BANKING ACTIVITY PROOF OF CASH Auditee: Account Name Auditor: Date: Beginning End Description Of Month Additions Reductions Of Month / / / / Per Bank Statement $ $ $ $ Deposits In Transit, Beginning + - Deposits In Transit, End + + Outstanding Checks, Beginning - - Outstanding Checks, End + - Other Reconciling Items Per Books $ $ $ $ (A) Comments: Ownership Of Cash On Hand: Due To Co. Treasurer - General $ Due To Co. Treasurer - Debt Service Due To Co. Treasurer - R & B Due To State Due To TxDOT Due To Parks and Wild Life Due To Other Governmental Entity Due To Other Taxing Entities Due to Other County Offices Due to Delinquent Tax Attorneys Refunds Due to Plaintiffs Refunds Due To Payers Returned Checks Held Bonds Held In Escrow Funds Held For Out Of County Service Other: Totals $ (A) 3d652648-6f86-4d1f-9023-4dee935d7dd8.xls, 400-Proof of Cash JTR/11-95 ______________ COUNTY, TEXAS INTERNAL CONTROL REVIEW SEPARATION OF DUTIES WORKSHEET Prep. By: Date: Rev. By: Date: FUNCTION PERSON PERSON PERSON PERSON DUTY/RESPONSIBILITY TYPE A B C D Receive Money Custody Issue Receipts Custody Open Mail/List Receipts Custody Prepare Bank Deposits Custody Approve Bank Deposits Approve Record Receipts Record Access To Unused Receipts Custody Prepares Inventory Unused Receipts Record Receives Bank Statement Custody Prepares Bank Reconciliation Custody Reviews Bank Reconciliation Approve Prepares Billings Custody Sends Billings Approve Authorized to Make Purchases Custody Receives Invoices Custody Prepares Requisitions Custody Approves Requisitions Approve Authorized to Make Refunds Approve Prepares Check For Refund Custody Signs Check For Refund Approve Authorized to Make Disbursement Custody Signs Check For Disbursement Approve Prepares Delinquency Letters Custody Prepares Monthly Reports Record Approves Monthly Reports Approve Prepares Time Reports Custody Approves Time Reports Approve Receives Payroll Checks Custody Distributes Payroll Checks Approve 3d652648-6f86-4d1f-9023-4dee935d7dd8.xls, 600-SeparationofDutiesWorksheet JTR/11-95 600-INTERNAL CONTROL QUESTIONNAIRE AUDITEE: AUDITOR: YES NO N/A COMMENTS GENERAL 1. Does your office have a procedures manual? 2. Does the procedures manual cover all duties and responsibilities? 3. Do you periodically review and update your procedures manual? 4. Are the officeholder's and employees' duties and responsibilities fixed? 5. Do you periodically rotate duties? 6. Do you require all employees to take vacations? 7. Is the work of employees on vacation performed by someone else during their absence? 8. Are all employees adequately trained? 9. Do you periodically assess training needs? 10. Is the officeholder appropriately bonded? 11. Are the other employees appropriately bonded? 12. Do you periodically review the adequacy of bonds? 13. Are employees performing their duties appropriately? 14. Is the workload current? 15. Is the office understaffed? 16. Do you have an inventory of all tangible assets? 17. Is the inventory up-to-date? 18. Is responsibility for the assets fixed? 19. Do you periodically review your inventory and account for all assets? 20. Does an internal/external auditor periodically audit your office? 21. Do you implement the auditor's appropriate recommendations? 22. Do you implement the auditor's recommendations on a timely basis? RECEIPTS 1. Are receipts filled out when money is received? 2. Are all receipts sequentially prenumbered? 3. Do you have adequate control over unissued receipts? 4. Do you periodically account for all unissued receipts? 5. Are all receipts dated and signed (or initialed) by the persons who issue them? 6. Are your receipts in at least three-part form? KDC/aek 9 7/28/2011 600-INTERNAL CONTROL QUESTIONNAIRE AUDITEE: AUDITOR: YES NO N/A COMMENTS 7. Is a copy of the receipt given to each person paying money? 8. Is a copy of the receipt kept by your office? 9. Is a copy of the receipt given to the accounting office? 10. Do receipts contain adequate space for information? RECEIPTS-Continued 11. Are employees instructed to ensure that the person paying appropriately completes a check before they issue a receipt? 12. Does your office have a policy of immediately stamping all checks with a restrictive endorsement? 13. If applicable, do you compare receipt amounts with supporting documentation to ensure the amounts are correct? 14. Does each person receiving cash have a separate cash drawer or register? 15. Is access to cash drawers or registers restricted to the persons responsible for them? 16. Does each person with a cash drawer or register balance out daily? 17. Is the balancing verified by someone who is not taking in money? 18. Are these persons collecting the appropriate amounts? (e.g., according to statutes, ordinances, etc.) 19. Is each person receiving money aware of the amounts that should be collected? 20. Do you periodically review the collected fine/fee amounts? 21. Does your office adequately safeguard money until it is deposited or remitted? 22. Does someone other than the person receiving money prepare the bank deposit? 23. Are bank deposits or remittances made daily? 24. Do you periodically compare receipt copies with bookkeeping entries? 25. Do you account for change funds? 26. Do you periodically review the adequacy of KDC/aek 10 7/28/2011 600-INTERNAL CONTROL QUESTIONNAIRE AUDITEE: AUDITOR: YES NO N/A COMMENTS change fund amounts? 27. Does your office open mail daily? 28. Is the mail opened by someone other than the persons taking in office receipts? 29. Does the person opening the mail prepare a record of the checks and cash received? 30. Does your office have a policy of immediately stamping checks received through the mail with a restrictive endorsement? 31. Is the bank deposit prepared by someone other than the person opening the mail? 32. Are mail receipts deposited or remitted daily? 33. Does your office have a system to account for installment or periodic payments? RECEIPTS-Continued 34. Does your office have a system to keep up with payment due dates? 35. Are all outstanding amounts known and accounted for? 36. Is there a control total for all outstanding amounts? 37. Do you periodically compare the control total with subsidiary records? 38. Is there a sufficient amount of double-checking of other employees' work? 39. Does the amount of double-checking increase/ decrease when staff size increases/decreases? DISBURSEMENTS 1. Are all disbursements made by check? 2. Are all checks sequentially prenumbered? 3. Are all checks preprinted with the name of the entity and other appropriate information, such as the name of the office and the name of the officeholder? 4. Do you account for and adequately safeguard all unused checks? 5. Are all voided checks marked "void" and accounted for? 6. Are checks prepared only when supporting KDC/aek 11 7/28/2011 600-INTERNAL CONTROL QUESTIONNAIRE AUDITEE: AUDITOR: YES NO N/A COMMENTS documentation is present and after such documentation is verified? 7. Are checks prevented from being made out to "cash" and "bearer"? 8. Is the payee line completed on all checks prior to approval? 9. Are checks approved by someone other than the person responsible for the bookkeeping? 10. Are checks prevented from being presigned? 11. Do you keep authorized check signatures to a minimum? 12. If a "stamp" or "check-signing" device is used, do you safeguard it and restrict access to it? 13. Does your office prepare and mail (or deliver) checks timely? 14. Are checks mailed without returning them to the person who approves them or who does the bookkeeping? 15. If applicable, are supporting documents, such as invoices and statements, canceled upon payment? DISBURSEMENTS-Continued 16. Is there a sufficient amount of double-checking of other employees' work? 17. Does the amount of double-checking increase/ decrease when staff size decreases/increases? BANK ACCOUNTS 1. Does your office maintain only the minimum number of bank accounts? 2. Are balances appropriately safeguarded according to provisions in the County depository contract or FDIC insurance? 3. Does your office reconcile bank accounts promptly after receiving bank statements? 4. Are reconciliations done by someone other than the person who prepares bank deposits and approves checks? KDC/aek 12 7/28/2011 600-INTERNAL CONTROL QUESTIONNAIRE AUDITEE: AUDITOR: YES NO N/A COMMENTS 5. Does the person who reconciles the bank statements receive those statements unopened from the bank? 6. Do you compare deposits shown on the bank statement with accounting records as to date and amount? 7. Do you verify the amount of service charges? 8. Do you account for all canceled checks? 9. Do you compare canceled checks with accounting records as to check number, date, amount and payee? 10. Do you examine canceled checks for alterations? 11. Do you examine canceled checks for unauthorized signatures? 12. Do you examine canceled checks for irregular endorsements? 13. Are items returned or rejected by the bank properly investigated and accounted for? 14. Are completed bank reconciliations reviewed and approved by someone other than the person performing the original reconciliation? 15. Is there a time period or date printed on the checks, after which they become void? 16. Are outstanding checks appropriately handled and accounted for once they become void? 17. Does your office policy prohibit pre- or post-dating of checks? ACCOUNTING, BOOKKEEPING, REPORTING 1. Does your office maintain a bookkeeping system to account for all financial-related transactions? 2. Do you maintain books of original entry? 3. Do you maintain adequate subsidiary records? 4. Does your office enter transactions daily? 5. Are transactions entered from appropriate sources (e.g., receipt copies, check copies)? 6. Do you verify daily entries for mathematical KDC/aek 13 7/28/2011 600-INTERNAL CONTROL QUESTIONNAIRE AUDITEE: AUDITOR: YES NO N/A COMMENTS accuracy? 7. Are the entries periodically reviewed by someone other than the person making them, comparing the entries with appropriate source documents? 8. Do you maintain a good audit trail for all transactions from source documents to accounting records, and from accounting records to source documents? 9. Do you maintain docket books as required by law? (J. P., District & County Courts) 10. Is all required information entered into the docket books? (J. P., District & County Courts) 11. Are entries to docket books current? (J. P., District and County Courts) 12. Do you periodically compare the docket books to source documents and other accounting records for accuracy? (J. P., District and County Courts) 13. Is the bookkeeping performed by someone other than the persons receiving cash, preparing bank deposits, and approving disbursements? 14. Does your office prepare and submit reports timely? 15. Do you compare reports against accounting records for accuracy? 16. Are reports reviewed and approved by someone other than the person preparing them? 17. Are reports audited monthly by the County Auditor? 18. Is there a sufficient amount of double-checking of others' work? 19. Does the amount of double-checking increase/ decrease when staff size decreases/increases? KDC/aek 14 7/28/2011 600-INTERNAL CONTROL QUESTIONNAIRE AUDITEE: AUDITOR: YES NO N/A COMMENTS SUPPLIES 1. Are requisitions required to obtain supplies? 2. Does your office have procedures and safeguards to prevent unauthorized use of supplies, especially those that are desirable for personal use? 3. Are procedures in place to transfer unneeded supplies to others who can use them? 4. Do you rotate responsibilities for supplies to avoid collusion? KDC/aek 15 7/28/2011 Handout 4 ______________ COUNTY, TEXAS 200-SAMPLE SIZE DETERMINATION To determine the adequate sample size for testing the following data is to be used: Acceptable Confidence Acceptable Upper Minimum Level Confidence Sample Precision Sample Desired Coefficient Error Rate Limit Size 68% 1.00 0% 3% 35 80% 1.35 0% 3% 54 85% 1.50 0% 3% 66 90% 1.64 0% 3% 75 95% 1.96 0% 3% 100 97% 2.00 0% 3% 132 99.70% 3.00 0% 3% 150 To generate a random number sequence from an established population using EXCEL: Go into TOOLS/OPTIONS/MANUAL Designate Manual / Take the (x) off of Recalculate Before Save OK The Cell Formula Is As Follows: = RAND()* (Ending Sequence No. - Beginning Sequence No.) + Beginning Sequence No. Follow these steps in attribute sampling. Document in work papers. 1 State the objectives of the audit test. 2 Define the population. 3 Define the sampling unit. 4 Define the attributes to be tested. 5 Specify an acceptable error rate. 6 Specify the required confidence level. 7 Specify the estimated error rate. 8 Determine the initial sample size. 9 Randomly select a sample. 10 Perform the audit procedures as outlined in the Audit Program and document the results. 11 Generalize from the sample to the population based on the results. 12 Perform error analysis (qualitative evaluation). 13 Decide on the acceptability of the population. Conclusions are to be documented. Reliance must be stated and formalized in workpapers.